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China Telecom Fine Tunes WVAS Cooperation Model

Communications Weekly, 9/08/08

On August 27, China Telecom (NYSE: CHA; 0728.HK) convened a meeting of wireless value-added service partners. One wireless value-added service provider (SP) who attended the meeting revealed that China Telecom announced it would create a CDMA network value chain that took both the operator and partners as its centers. The current SP management model, by comparison, is more focused on the operator. China Telecom said it would continue to fine-tune its SP cooperation system to establish channels for SPs to submit complaints or appeals.

Under China Telecom's plans, all former CDMA SPs will be able to register their information with China Telecom as of September 1, after which the operator will select SPs to sign an agreement with the company by the end of the month.

A Beijing service provider who attended the meeting revealed that China Telecom's SP partnership management system was based on China Mobile's (NYSE: CHL; 0941.HK) Monternet SP partnership system. Telecom's profit-sharing model includes the three categories of SP, content provider (CP), and applications provider (AP) with percentages of 85%, 50%, and 70% respectively, similar to China Mobile's system. In addition, China Telecom gives SPs an account period of 3 months, under which SPs must have revenues of over RMB 50,000 in order to collect, while China Mobile has account periods of one month.

Keywords: revenue share 0728.HK CDMA CHA China Telecom content provider SP wireless WVAS

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